INTEGRATED ANNUAL REPORT 2024

for the year ended 30 September 2024

How we sustain value

Our relationships (SRC)

Material inputs
  • Engaged workforce
  • Constructive relationship with government
  • Investor confidence
  • Trusted brands and strong consumer reputation
  • Positive supplier and customer relations
  • Robust operating context and strong levels of institutional trust
Our actions to sustain value
  • Investment in employee value proposition
  • Structured engagement with regulators; focus on compliance and societal contributions
  • Regular investor communication
  • Investment in product safety and quality
  • Product and process innovation
  • Active engagement with suppliers and customers
  • Trading terms that are fair, equal and available to all customers
Outcomes of our activities

Generally positive relations across stakeholder groups, reflected by:

  • 7% reduction in consumer complaints
  • R14,3 billion B-BBEE supplier spend
  • R54 million spend to support black farmers and small businesses
  • Year-on-year HEPS growth of 4%
  • Year-on-year dividend growth of 4%

Continuing concerns in certain areas

  • Pending listeria class action lawsuit – with recent increased media focus
Challenges in securing inputs
  • Finding the right balance in addressing the sometimes competing interests of stakeholders, each of whom add value to the company

Our people (HC)

Material inputs
  • Strong and diverse board
  • Experienced executive team
  • 8 785 permanent employees
  • Enabling workplace environment with performance-and purpose-led culture
Our actions to sustain value
  • Implementing people strategy to attract, retain and develop a diverse talent base, with strong leadership capacity
  • Invested in employee reward and personal development opportunities
  • R4,8 billion on salaries and benefits
  • R73,5 million on employee training and development (SA only)
  • Focus on diversity and employment equity
  • Embedded enhanced employee wellbeing programme (THRIVE)
Outcomes of our activities

Investment in talent and personal development

  • Accelerated core capability in manufacturing, customer, marketing and R&D
  • Launched accelerated leadership development programme

Progress in promoting employee diversity

  • 64% ACI representation at senior management and 58% at top management
  • 40% female representation at senior management and 25% at top management

Board diversity

  • 45% black (South African) and 36% female on our board
  • Directors with extensive FMCG knowledge, global experience and skills in digitalisation and innovation

Improvements in employee health and safety

  • One work-related fatality (2023: one)
  • 0,19 lost-time injury frequency rate (2023: 0,25)
Challenges in securing inputs
  • Technical skills shortages
  • Changing employee career expectations and priorities
  • Increasing emigration from South Africa
  • Increased cost of attracting and retaining skills
  • Company underperformance in recent years

Our brand, reputation and company culture (IC)

Material inputs
  • Established strong brand and reputation
  • Unique product formulations and trusted recipes
  • Research and development capacity
  • Internal governance and business systems
  • Company culture
Our actions to sustain value
  • Focus on innovation and renovation to meet consumer needs including on value, health and nutrition, convenience, e-commerce and sustainability
  • Deploy marketing best practice toolkit across the business
  • Drive relevance in value segment by building clear benefits of current brands and introducing tiered offerings
Outcomes of our activities

Sustained a strong brand presence

  • Most of the 10 “power brands” and 6 “specialist brands” maintained their brand equity
  • Continued to deepen our ability to offer local brands with local flavours, leveraging cross-brand collaborations to offer consumers more of what they love
  • 22 awards

Innovation

  • Completed 48 innovation projects across our consumer growth areas
  • Innovations were focused on driving relevance and affordability for consumers
Challenges in securing inputs
  • Constrained consumer environment favouring affordability over brand
  • Increased retailer concentration and growing role of private label
  • High prevalence of promotional activity

Our manufacturing capacity (MC)

Material inputs
  • 37 manufacturing facilities (including Chococam in Cameroon)
  • Efficient logistics and distribution activities
Our actions to sustain value
  • R0,97 billion capital expenditure in manufacturing and distribution capability and technology
  • 4,9% improvement in overall equipment effectiveness (OEE) in focus sites over past three years
  • R200 million in cost savings through continuous improvement initiatives
Outcomes of our activities

Continued investment in plant and equipment

  • Expanded capacity optimising efficiency upgrading infrastructure and realising innovation opportunities
  • Key initiatives included:
    • Aerosol line
    • Peanut butter move
    • Jungle flaker plant

Some challenges remain

  • High agricultural and other input cost inflation
  • Short supply of certain ingredients resulting in factory under-recoveries
Challenges in securing inputs
  • Infrastructure challenges: electricity, water and sanitation, and rail and port networks
  • Shortage of required technical skills to run and maintain plant
  • Adverse weather patterns such as flooding

Our financial strength (FC)

Material inputs
  • Equity
  • Borrowings
  • Cash generated from operations
Our actions to sustain value
  • Implementation of fit-for-future operating model with decentralised decision-making close to the operations
  • Continued operational efficiency drive
  • Corporate governance structures
  • Continued acceleration of portfolio optimisation plans
  • Guiding principles in response to the growth of private label
Outcomes of our activities
  • 15,3% return on invested capital (ROIC) (2023: 15,1% (restated)) (2023 reported: 14,7%)
  • R299 million paid in net interest (2023: R238 million)
  • R5,5 billion cash generated from operations (2023: R2,7 billion)
  • Savings of R200 million (2023: R525 million)
  • Total dividend per share declared: 1 034 cents (2023: 991)
  • 16,8% return on equity (2023: 15,8% (restated)) (2023 reported: 15,7%)
Challenges in securing inputs
  • Rising interest rate cycles
  • Underperformance resulting in higher cost of capital

Invested capital adjusted to exclude re-instated goodwill on discontinued businesses

Our raw material inputs (NC)

Material inputs
  • Local and imported raw material ingredients
  • Water (municipal and own borehole) for production
  • Fuel (diesel and petrol) for distribution and manufacture
  • Energy for manufacturing (primarily Eskom electricity)
  • Fertile soil and conducive agricultural conditions
Our actions to sustain value
  • Energy and water efficiency measures
  • Investment in renewable energy to strengthen energy security and reduce carbon footprint
  • Innovations and partnerships to reduce packaging and food waste
Outcomes of our activities

Some progress in mitigating impacts

  • 9,1% reduction in direct GHG emissions
  • 0,9% reduction in GHG emissions intensity
  • 6,0% reduction in absolute energy use
  • 2,7% increase in electrical energy intensity
  • 5,0% reduction in absolute water use
  • 3,7% increase in water-use intensity
  • 26,4% reduction in waste to landfill intensity

Challenges remain in certain areas

  • The global food system is recognised as having a significant impact on biodiversity and habitat loss, climate change and packaging pollution, placing direct pressure on the resources we depend on and increasing consumer and regulatory practices
Challenges in securing inputs
  • Climate change and extreme weather events impacting quality, quantity and cost
  • Supply disruptions in certain key inputs
  • Inefficiencies in South African ports resulting in delays